NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF SEPTEMBER 30, 2020
(Unaudited)
NOTE
1 – ORGANIZATION AND NATURE OF BUSINESS
Organization
Investview,
Inc. was incorporated on January 30, 1946, under the laws of the state of Utah as the Uintah Mountain Copper Mining Company. In
January 2005 the Company changed domicile to Nevada, and changed its name to Voxpath Holding, Inc. In September of 2006 the Company
merged The Retirement Solution Inc. through a Share Purchase Agreement into Voxpath Holdings, Inc. and then changed its name to
TheRetirementSolution.Com, Inc. In October 2008 the Company changed its name to Global Investor Services, Inc., before changing
its name to Investview, Inc., on March 27, 2012.
On
March 31, 2017, we entered into a Contribution Agreement with the members of Wealth Generators, LLC, a limited liability company
(“Wealth Generators”), pursuant to which the Wealth Generators members agreed to contribute 100% of the outstanding
securities of Wealth Generators in exchange for an aggregate of 1,358,670,942 shares of our common stock. The closing of the Contribution
Agreement was effective April 1, 2017, and Wealth Generators became our wholly owned subsidiary and the former members of Wealth
Generators became our stockholders and control the majority of our outstanding common stock.
On
June 6, 2017, we entered into an Acquisition Agreement with Market Trend Strategies, LLC, a company whose members are also former
members of our management. Under the Acquisition Agreement, we spun-off our operations that existed prior to the merger with Wealth
Generators and sold the intangible assets used in those pre-merger operations in exchange for Market Trend Strategies’ assumption
of $419,139 in pre-merger liabilities.
On
February 28, 2018, we filed a name change for Wealth Generators, LLC to Kuvera, LLC (“Kuvera”) and on May 7, 2018
we established WealthGen Global, LLC as a Utah limited liability company and a wholly owned subsidiary of Investview, Inc.
On
May 7, 2018, we established WealthGen Global, LLC as a Utah limited liability company and our wholly owned subsidiary.
On
July 20, 2018, we entered into a Purchase Agreement with United Games Marketing LLC, a Utah limited liability company, to purchase
its wholly owned subsidiaries United Games, LLC and United League, LLC for 50,000,000 shares of our common stock.
On
November 12, 2018, we established Kuvera France, S.A.S. to handle sales of our financial education and research in the European
Union.
On
December 30, 2018, our wholly owned subsidiary S.A.F.E. Management, LLC received its registration and disclosure approval from
the National Futures Association. S.A.F.E. Management, LLC is now a New Jersey State Registered Investment Adviser, Commodities
Trading Advisor, Commodity Pool Operator, and approved for over the counter FOREX advisory services.
On
January 17, 2019 we renamed our non-operating wholly owned subsidiary WealthGen Global, LLC to SafeTek, LLC, a Utah Limited Liability
Company.
Effective
July 22, 2019 we renamed our non-operating wholly owned subsidiary Razor Data, LLC to APEX Tek, LLC, a Utah Limited Liability
Company.
Nature
of Business
We
own a number of companies that each operate independently, but are accretive to one another. We are establishing a portfolio of
wholly owned subsidiaries delivering leading-edge technologies, services, and research, dedicated primarily to the individual
consumer. Following is a description of each of our companies.
Kuvera,
LLC provides research, education, and investment tools designed to assist the self-directed investor in successfully navigating
the financial markets. These services include research, trade alerts, and live trading rooms that include instruction in equities,
options, FOREX, ETFs, binary options, crowdfunding and cryptocurrency sector education. In addition to trading tools and research,
we also offer full education and software applications to assist the individual in debt reduction, increased savings, budgeting,
and proper tax management. Each product subscription includes a core set of trading tools/research along with the personal finance
management suite to provide an individual with complete access to the information necessary to cultivate and manage his or her
financial situation.
INVESTVIEW,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF SEPTEMBER 30, 2020
(Unaudited)
Different
packages are available through a monthly subscription that can be cancelled at any time at the discretion of the customer. A unique
component of the product marketing plan is the distribution method whereby all subscriptions are sold via current participating
customers who choose to distribute and sell the services by participating in the bonus plan. The bonus plan participation is purely
optional but enables individuals to create an additional income stream to further support their personal financial goals and objectives.
Kuvera
France S.A.S. is our entity in France that will distribute Kuvera products and services throughout the European Union.
S.A.F.E.
Management, LLC is a Registered Investment Adviser and Commodity Trading Adviser that has been established to deliver automated
trading strategies to individuals who find they lack the time to trade for themselves.
United
League, LLC owns a number of proprietary technologies including FIREFAN a social app for sports enthusiasts. Technologies
created to support any of the Investview companies are held under the United League structure.
United
Games, LLC is the distribution network for United League technologies. Since the acquisition of United Games in July of 2018,
we are working to combine the distributors of Kuvera and United Games. The operations of United Games and United League are currently
being assessed now that we have completed our integration of their software and personnel. These entities may be eliminated or
re-structured in the future as we are currently assessing the potential future for social gaming app known as FIREFAN.
SAFETek,
LLC (formerly WealthGen Global, LLC) is a new addition that we are currently establishing for expansion plans in the high-speed
processing and cloud computing environment.
Apex
Tek, LLC (formerly Razor Data, LLC) delivers the APEX program which permits individuals to purchase assets that will generate
monthly cash flow. As of September 30, 2020 we have ceased selling the APEX package. We may re-introduce APEX at a later date
after further evaluation of the model.
Investment
Tools & Training, LLC currently has no operations or activities.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations
(Regulation S-X) of the Securities and Exchange Commission (the “SEC”) and with the instructions to Form 10-Q. Accordingly,
they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. The results of operations for the six months ended September 30, 2020, are not necessarily
indicative of the operating results that may be expected for the year ending March 31, 2021. These unaudited condensed consolidated
financial statements should be read in conjunction with the March 31, 2020 consolidated financial statements and notes thereto
included in our Annual Report on Form 10-K for the year ended March 31, 2020.
Principles
of Consolidation
The
consolidated financial statements include the accounts of Investview, Inc., and our wholly owned subsidiaries, Kuvera, LLC, Investment
Tools & Training, LLC, Apex Tek, LLC (formerly Razor Data, LLC), S.A.F.E. Management, LLC, SafeTek, LLC (formerly WealthGen
Global, LLC), United Games, LLC, United League, LLC, and Kuvera France S.A.S. Through March 31, 2019 we had determined that one
affiliated entity, Kuvera LATAM S.A.S., which we previously conducted business with, was a variable interest entity and we were
the primary beneficiary of the entity’s activities, which are similar to those of Kuvera, LLC. As a result, through March
31, 2019 we had consolidated the accounts of this variable interest entity into the consolidated financial statements. Further,
because the Company did not have any ownership interest in this variable interest entity, the Company had allocated the contributed
capital in the variable interest entity as a component of noncontrolling interest. As of April 1, 2019 Kuvera LATAM S.A.S. had
no operations and ceased to exist, therefore, as of that date, no consolidation of the entity was necessary and we recorded a
gain on deconsolidation of $53,739 to eliminate the intercompany account with Kuvera LATAM S.A.S. All intercompany transactions
and balances have been eliminated in consolidation.
INVESTVIEW,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF SEPTEMBER 30, 2020
(Unaudited)
Financial
Statement Reclassification
Certain
account balances from prior periods have been reclassified in these consolidated financial statements to conform to current period
classifications.
Use
of Estimates
The
preparation of these unaudited condensed consolidated financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from those estimates.
Foreign
Exchange
We
have consolidated the accounts of Kuvera France S.A.S. into our consolidated financial statements. The operations of Kuvera France
S.A.S. are conducted in France and its functional currency is the Euro.
The
financial statements of Kuvera France S.A.S. are prepared using their functional currency and have been translated into U.S. dollars
(“USD”). Assets and liabilities are translated into USD at the applicable exchange rates at period-end. Stockholders’
equity is translated using historical exchange rates. Revenue and expenses are translated at the average exchange rates for the
period. Any translation adjustments are included as foreign currency translation adjustments in accumulated other comprehensive
income in our stockholders’ equity (deficit).
The
following rates were used to translate the accounts of Kuvera France S.A.S. and Kuvera LATAM S.A.S. into USD at the following
balance sheet dates.
|
|
September 30, 2020
|
|
|
March 31, 2020
|
|
Euro to USD
|
|
|
1.17300
|
|
|
|
1.10314
|
|
The
following rates were used to translate the accounts of Kuvera France S.A.S. into USD for the following operating periods.
|
|
Six Months Ended September 30,
|
|
|
|
2020
|
|
|
2019
|
|
Euro to USD
|
|
|
1.135711
|
|
|
|
1.11795
|
|
Restricted
Cash
The
following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet that
sum to the total of the same such amounts shown in the statement of cash flows.
|
|
September 30, 2020
|
|
|
March 31, 2020
|
|
Cash and cash equivalents
|
|
$
|
583,955
|
|
|
$
|
137,177
|
|
Restricted cash, current
|
|
|
151,489
|
|
|
|
-
|
|
Restricted cash, long term
|
|
|
288,411
|
|
|
|
-
|
|
Total cash, cash equivalents, and restricted cash shown on the statement of cash flows
|
|
$
|
1,023,855
|
|
|
$
|
137,177
|
|
Amount
included in restricted cash represent funds required to be held in an escrow account by a contractual agreement and will be used
for paying dividends to our Series B Preferred Stock holders.
INVESTVIEW,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF SEPTEMBER 30, 2020
(Unaudited)
Cryptocurrencies
We
hold cryptocurrency-denominated assets (“cryptocurrencies”) and include them in our consolidated balance sheet as
other current assets. We record cryptocurrencies at fair market value and recognize the change in the fair value of our cryptocurrencies
as an unrealized gain or loss in the consolidated statement of operations. As of September 30, 2020 and March 31, 2020 the fair
value of our cryptocurrencies was $155,628 and $96,022, respectively. During the six months ended September 30, 2020 we recorded
$1,096 and $176,817 as a total realized and unrealized gain (loss) on cryptocurrency, respectively. During the six months
ended September 30, 2019 we recorded $(667) and $25,330 as a total realized and unrealized gain (loss) on cryptocurrency, respectively.
During the three months ended September 30, 2020 we recorded $1,096 and $85,331 as a total realized and unrealized gain (loss)
on cryptocurrency, respectively. During the three months ended September 30, 2019 we recorded $(1,077) and $(122,080) as a total
realized and unrealized gain (loss) on cryptocurrency, respectively.
Fixed
Assets
Fixed
assets are stated at cost and depreciated using the straight-line method over their estimated useful lives. When retired or otherwise
disposed, the carrying value and accumulated depreciation of the fixed asset is removed from its respective accounts and the net
difference less any amount realized from disposition is reflected in earnings. Expenditures for maintenance and repairs which
do not extend the useful lives of the related assets are expensed as incurred.
As
of September 30, 2020 fixed assets were made up of the following:
|
|
Estimated
|
|
|
|
|
|
|
Useful
|
|
|
|
|
|
|
Life
|
|
|
|
|
|
|
(years)
|
|
|
Value
|
|
Furniture, fixtures, and equipment
|
|
|
10
|
|
|
$
|
12,792
|
|
Computer equipment
|
|
|
3
|
|
|
|
21,143
|
|
Data processing equipment
|
|
|
3
|
|
|
|
7,095,515
|
|
|
|
|
|
|
|
|
7,129,450
|
|
Accumulated depreciation as of September 30, 2020
|
|
|
|
|
|
|
(1,211,446
|
)
|
Net book value, September 30, 2020
|
|
|
|
|
|
$
|
5,918,004
|
|
Total
depreciation expense for the six months ended September 30, 2020 and 2019, was $982,819 and $36,007, respectively.
Long-Lived
Assets – Intangible Assets & License Agreement
We
account for our intangible assets and long-term license agreement in accordance with ASC Subtopic 350-30, General Intangibles
Other Than Goodwill, and ASC Subtopic 360-10-05, Accounting for the Impairment or Disposal of Long-Lived Assets. ASC Subtopic
350-30 requires assets to be measured based on the fair value of the consideration given or the fair value of the assets (or net
assets) acquired, whichever is more clearly evident and, thus, more reliably measurable. Further, ASC Subtopic 350-30 requires
an intangible asset to be amortized over its useful life and for the useful life to be evaluated every reporting period to determine
whether events or circumstances warrant a revision to the remaining period of amortization. If the estimate of useful life is
changed the remaining carrying amount of the intangible asset is amortized prospectively over the revised remaining useful life.
Costs of internally developing, maintaining, or restoring intangible assets are recognized as an expense when incurred.
In
June of 2017 we issued 80,000,000 shares of common stock with a value of $2,256,000 for a 15-year license agreement. Amortization
recognized for the six months ended September 30, 2020 and 2019 was $0 and $75,406, respectively, and the long-term license agreement
was recorded at a net value of $0 as of September 30, 2020 and March 31, 2020 due to the asset being impaired as of March 31,
2020.
INVESTVIEW,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF SEPTEMBER 30, 2020
(Unaudited)
In
June of 2018 we purchased United Games, LLC and United League, LLC and recorded the transaction as a business combination. Intangible
assets acquired in the business combination were recorded at fair value on the date of acquisition and are being amortized on
a straight-line method over their estimated useful lives. As of September 30, 2020 intangible assets were made up of the following:
|
|
Estimated
|
|
|
|
|
|
|
Useful
|
|
|
|
|
|
|
Life
|
|
|
|
|
|
|
(years)
|
|
|
Value
|
|
FireFan mobile application
|
|
|
4
|
|
|
$
|
331,000
|
|
Back office software
|
|
|
10
|
|
|
|
408,000
|
|
Tradename/trademark - FireFan
|
|
|
5
|
|
|
|
248,000
|
|
Tradename/trademark - United Games
|
|
|
0.45
|
|
|
|
4,000
|
|
|
|
|
|
|
|
|
991,000
|
|
Accumulated amortization as of September 30, 2020
|
|
|
|
|
|
|
(384,930
|
)
|
Net book value, September 30, 2020
|
|
|
|
|
|
$
|
606,070
|
|
Amortization
expense for the six months ended September 30, 2020 and 2019 was $86,812 and $169,539, respectively. Amortization expense is expected
to be as follows:
Remainder of 2021
|
|
$
|
86,338
|
|
Fiscal year ending March 31, 2022
|
|
|
173,150
|
|
Fiscal year ending March 31, 2023
|
|
|
173,150
|
|
Fiscal year ending March 31, 2024
|
|
|
32,589
|
|
Fiscal year ending March 31, 2025
|
|
|
6,148
|
|
Fiscal year ending March 31, 2026 and beyond
|
|
|
134,695
|
|
|
|
$
|
606,070
|
|
Impairment
of Long-Lived Assets
We
have adopted ASC Subtopic 360-10, Property, Plant and Equipment (“ASC 360-10”). ASC 360-10 requires that long-lived
assets and certain identifiable intangibles held and used by the Company be reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be recoverable or when the historical cost carrying value
of an asset may no longer be appropriate. Events relating to recoverability may include significant unfavorable changes in business
conditions, recurring losses, or a forecasted inability to achieve break-even operating results over an extended period.
We
evaluate the recoverability of long-lived assets based upon future net cash flows expected to result from the asset, including
eventual disposition. Should impairment in value be indicated, the carrying value of intangible assets will be adjusted and an
impairment loss is recorded equal to the difference between the asset’s carrying value and fair value or disposable value.
During
the six months ended September 30, 2020 we fully impaired data processing equipment that had a cost basis of $84,939 and we fully
impaired a computer that had a cost basis of $1,609 because the assets were no longer in use. The accumulated depreciation of
the assets at the time they were written off was $19,903, therefore we recognized impairment expense of $66,645 for the six months
ended September 30, 2020. No impairment expense was recognized during the six months ended September 30, 2019.
Fair
Value of Financial Instruments
Fair
value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date, based on our principal or, in the absence of a principal, most advantageous
market for the specific asset or liability.
U.S.
generally accepted accounting principles provide for a three-level hierarchy of inputs to valuation techniques used to measure
fair value, defined as follows:
|
Level
1:
|
Inputs
that are quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity can access.
|
|
|
|
|
Level
2:
|
Inputs
other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly,
for substantially the full term of the asset or liability, including:
|
|
-
|
quoted
prices for similar assets or liabilities in active markets;
|
|
-
|
quoted
prices for identical or similar assets or liabilities in markets that are not active;
|
|
-
|
inputs
other than quoted prices that are observable for the asset or liability; and
|
|
-
|
inputs
that are derived principally from or corroborated by observable market data by correlation or other means.
|
|
Level
3:
|
Inputs
that are unobservable and reflect management’s own assumptions about the inputs market participants would use in pricing
the asset or liability based on the best information available in the circumstances (e.g., internally derived assumptions
surrounding the timing and amount of expected cash flows).
|
INVESTVIEW,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF SEPTEMBER 30, 2020
(Unaudited)
Our
financial instruments consist of cash, accounts receivable, accounts payable, and debt. We have determined that the book value
of our outstanding financial instruments as of September 30, 2020 and March 31, 2020, approximates the fair value due to their
short-term nature.
Items
recorded or measured at fair value on a recurring basis in the accompanying consolidated financial statements consisted of the
following items as of September 30, 2020:
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Cryptocurrencies
|
|
$
|
155,628
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
155,628
|
|
Total Assets
|
|
$
|
155,628
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
155,628
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative liability
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
4,265
|
|
|
$
|
4,265
|
|
Total Liabilities
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
4,265
|
|
|
$
|
4,265
|
|
Items
recorded or measured at fair value on a recurring basis in the accompanying consolidated financial statements consisted of the
following items as of March 31, 2020:
|
|
Level
1
|
|
|
Level
2
|
|
|
Level
3
|
|
|
Total
|
|
Cryptocurrencies
|
|
$
|
96,022
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
96,022
|
|
Total
Assets
|
|
$
|
96,022
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
96,022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative
liability
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
793,495
|
|
|
$
|
793,495
|
|
Total
Liabilities
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
793,495
|
|
|
$
|
793,495
|
|
Sale
and Leaseback
Through
our wholly-owned subsidiary, APEX Tex, LLC, we sold high powered data processing equipment (“APEX”) to our customers
and they leased the equipment back to SAFETek, LLC, another of our wholly-owned subsidiaries. We account for these transactions
under ASC 842-40 where the leaseback has been deemed a sales-type lease due to the lease term generally covering the entire economic
life of the equipment and our likelihood to purchase the asset at the end of the lease term. In accordance with ASC 842-40 we
have recorded the data processing equipment as a fixed asset on our balance sheet and we have accounted for the amounts received
for the equipment as a financial liability, in other liabilities on our balance sheet. Further, we will recognize interest on
the financial liability over the term of the lease to ensure the financial liability equates to the total amounts to be paid over
the life of the lease. During the six months ended September 30, 2020 we had the following activity related to our sale and leaseback
transactions:
|
|
Total Financial Liability
|
|
|
Contra-Liability
|
|
|
Net Financial Liability
|
|
|
Current [1]
|
|
|
Long Term
|
|
Balance as of March 31, 2020
|
|
$
|
53,828,000
|
|
|
$
|
(38,535,336
|
)
|
|
$
|
15,292,664
|
|
|
$
|
11,407,200
|
|
|
$
|
3,885,464
|
|
Proceeds from sales of APEX
|
|
|
5,001,622
|
|
|
|
-
|
|
|
|
5,001,622
|
|
|
|
|
|
|
|
|
|
Interest recorded on financial liability
|
|
|
8,348,378
|
|
|
|
(8,348,378
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Payments made for leased equipment
|
|
|
(2,125,300
|
)
|
|
|
-
|
|
|
|
(2,125,300
|
)
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
-
|
|
|
|
3,995,914
|
|
|
|
3,995,914
|
|
|
|
|
|
|
|
|
|
Balance as of September 30, 2020
|
|
$
|
65,052,700
|
|
|
$
|
(42,887,800
|
)
|
|
$
|
22,164,900
|
|
|
$
|
14,077,200
|
|
|
$
|
8,087,700
|
|
[1]
Represents lease payments to be made in the next 12 months
INVESTVIEW,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF SEPTEMBER 30, 2020
(Unaudited)
The
$42,887,800 is expected to be recognized into interest as follows:
Remainder of 2021
|
|
$
|
4,782,861
|
|
Fiscal year ending March 31, 2022
|
|
|
9,565,721
|
|
Fiscal year ending March 31, 2023
|
|
|
9,565,721
|
|
Fiscal year ending March 31, 2024
|
|
|
9,565,721
|
|
Fiscal year ending March 31, 2025 and beyond
|
|
|
9,407,776
|
|
|
|
$
|
42,887,800
|
|
During
the six months ended September 30, 2020 we received additional proceeds for APEX sales which were recorded in the customer advance
amount shown on our balance sheet, resulting in a net increase in the account of $81,845 since March 31, 2020. As of
September 30, 2020 we have ceased selling the APEX package. We may re-introduce APEX at a later date after further evaluation
of the model.
Revenue
Recognition
Subscription
Revenue
The
majority of our revenue is generated by subscription sales and payment is received at the time of purchase. We recognize subscription
revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer
and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to provide
services over a fixed subscription period; therefore, we recognize revenue ratably over the subscription period and deferred revenue
is recorded for the portion of the subscription period subsequent to each reporting date. Additionally, we offer a 10-day trial
period to first time subscription customers, during which a full refund can be requested if a customer does not like the product.
Revenues are deferred during the trial period as collection is not probable until that time has passed. Revenues are presented
net of refunds, sales incentives, credits, and known and estimated credit card chargebacks.
Mining
Revenue
Through
our wholly owned subsidiary, SAFETek, LLC, we lease equipment under a sales-type lease and use the equipment on blockchain networks
to validate and add blocks of transactions to blockchain ledgers (commonly referred to as “mining”). As compensation
for mining we are issued fees from processors and/or block rewards that are newly created cryptocurrency units granted to us.
Our mining activities constitute our ongoing major and central operations of SAFETek, LLC. Because we do not have contracts, nor
do we have customers associated with our mining revenue, we recognize revenue when fees and/or rewards are settled, or ultimately
granted to us as a result of our mining activities.
Fee
Revenue
We
generate fee revenue from our customers through SAFE Management, our subsidiary licensed as a Registered Investment Advisor and
Commodities Trading Advisor. We recognize fee revenue in accordance with ASC 606-10 where revenue is measured based on a consideration
specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract.
Our performance obligation is to deliver fully managed trading services to individuals who do not meet the requirements of Qualified
Investors and who lack the time to trade for themselves. We recognize fee revenue as our performance obligation is met and we
receive payment for such advisory fees in the month following recognition.
Revenue
generated for the six months ended September 30, 2020 is as follows:
|
|
Subscription
Revenue
|
|
|
Mining Revenue
|
|
|
Fee Revenue
|
|
|
Total
|
|
Gross billings/receipts
|
|
$
|
10,159,115
|
|
|
$
|
3,836,285
|
|
|
$
|
7,723
|
|
|
$
|
14,003,123
|
|
Refunds, incentives, credits, and chargebacks
|
|
|
(659,970
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(659,970
|
)
|
Net revenue
|
|
$
|
9,499,145
|
|
|
$
|
3,836,285
|
|
|
$
|
7,723
|
|
|
$
|
13,343,153
|
|
For
the six months ended September 30, 2020 foreign and domestic revenues were approximately $9 million and $4.4 million, respectively.
INVESTVIEW,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF SEPTEMBER 30, 2020
(Unaudited)
Revenue
generated for the six months ended September 30, 2019 is as follows:
|
|
Subscription
Revenue
|
|
|
Mining Revenue
|
|
|
Fee Revenue
|
|
|
Total
|
|
Gross billings/receipts
|
|
$
|
16,117,861
|
|
|
$
|
-
|
|
|
$
|
5,369
|
|
|
$
|
16,123,230
|
|
Refunds, incentives, credits, and chargebacks
|
|
|
(1,369,393
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,369,393
|
)
|
Net revenue
|
|
$
|
14,748,468
|
|
|
$
|
-
|
|
|
$
|
5,369
|
|
|
$
|
14,753,837
|
|
For
the six months ended September 30, 2019 foreign and domestic revenues were approximately $13.9 million and $800,000, respectively.
Revenue
generated for the three months ended September 30, 2020 is as follows:
|
|
Subscription
Revenue
|
|
|
Mining Revenue
|
|
|
Fee Revenue
|
|
|
Total
|
|
Gross billings/receipts
|
|
$
|
5,599,155
|
|
|
$
|
2,493,739
|
|
|
$
|
3,710
|
|
|
$
|
8,096,604
|
|
Refunds, incentives, credits, and chargebacks
|
|
|
(343,267
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(343,267
|
)
|
Net revenue
|
|
$
|
5,255,888
|
|
|
$
|
2,493,739
|
|
|
$
|
3,710
|
|
|
$
|
7,753,337
|
|
For
the three months ended September 30, 2020 foreign and domestic revenues were approximately $7.3 million and $426,000, respectively.
Revenue
generated for the three months ended September 30, 2019 is as follows:
|
|
Subscription
Revenue
|
|
|
Mining Revenue
|
|
|
Fee Revenue
|
|
|
Total
|
|
Gross billings/receipts
|
|
$
|
7,825,160
|
|
|
$
|
-
|
|
|
$
|
5,369
|
|
|
$
|
7,830,529
|
|
Refunds, incentives, credits, and chargebacks
|
|
|
(588,405
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(588,405
|
)
|
Net revenue
|
|
$
|
7,236,755
|
|
|
$
|
-
|
|
|
$
|
5,369
|
|
|
$
|
7,242,124
|
|
For
the three months ended September 30, 2019 foreign and domestic revenues were approximately $6.8 million and $403,000, respectively.
Net
Income (Loss) per Share
We
follow ASC subtopic 260-10, Earnings per Share (“ASC 260-10”), which specifies the computation, presentation, and
disclosure requirements of earnings per share information. Basic loss per share has been calculated based upon the weighted average
number of common shares outstanding. Convertible debt, stock options, and warrants have been excluded as common stock equivalents
in the diluted loss per share because their effect is anti-dilutive on the computation.
Potentially
dilutive securities excluded from the computation of basic and diluted net loss per share are as follows:
|
|
September 30,
2020
|
|
|
September 30,
2019
|
|
Options to purchase common stock
|
|
|
-
|
|
|
|
35,000
|
|
Warrants to purchase common stock
|
|
|
233,060
|
|
|
|
599,800
|
|
Notes convertible into common stock
|
|
|
161,742,478
|
|
|
|
58,416,067
|
|
Totals
|
|
|
161,975,538
|
|
|
|
59,050,867
|
|
Lease
Obligation
We
determine if an arrangement is a lease at inception. Operating leases are included in the
operating lease right-of-use asset account, the operating lease liability, current account, and the operating lease liability,
long term account in our balance sheet. Right-of-use assets represent our right to use an underlying asset for the lease term
and lease liabilities represent our obligation to make lease payments arising from the lease.
INVESTVIEW,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF SEPTEMBER 30, 2020
(Unaudited)
Operating
lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over
the lease term. For leases in which the rate implicit in the lease is not readily determinable, we use our incremental borrowing
rate based on the information available at commencement date in determining the present value of lease payments. We
have elected to not apply the recognition requirements of ASC 842 to short-term leases (leases with terms of twelve months or
less). Lease terms include options to extend or terminate the lease when it is reasonably
certain that we will exercise that option. Lease expense for operating lease arrangements is recognized on a straight-line basis
over the lease term. We have elected the practical expedient and will not separate non-lease components from lease components
and will instead account for each separate lease component and non-lease component associated with the lease components
as a single lease component.
NOTE
3 – RECENT ACCOUNTING PRONOUNCEMENTS
There
are no recently issued accounting pronouncements that the Company has not yet adopted that they believe are applicable or would
have a material impact on the financial statements of the Company.
NOTE
4 – GOING CONCERN AND LIQUIDITY
Our
financial statements are prepared using generally accepted accounting principles applicable to a going concern that contemplates
the realization of assets and liquidation of liabilities in the normal course of business. We have incurred significant recurring
losses, which have resulted in an accumulated deficit of $52,536,063 as of September 30, 2020, along with a net loss of $6,101,547
for the six months ended September 30, 2020. Additionally, as of September 30, 2020, we had cash of $583,955 and a working capital
deficit of $18,383,173. These factors raise substantial doubt about our ability to continue as a going concern.
Historically
we have relied on increasing revenues and new debt and equity financing to pay for operational expenses and debt as it came due.
During the six months ended September 30, 2020, we raised $1,405,300 in cash proceeds from new debt arrangements and raised $4,474,137
in cash proceeds from related parties. Additionally, net cash provided by operations was $661,629 for the six months ended
September 30, 2020. Subsequent to September 30, 2020, we received gross proceeds of $93,300 in connection with our Unit Offering
(see NOTE 11). Additionally, subject to a Securities Purchase agreement entered into in April 2020 we have a commitment from an
investor to purchase a $9 million promissory note on or before October 31, 2020, subject to certain conditions.
On
January 30, 2020, the World Health Organization declared the coronavirus outbreak a “Public Health Emergency of International
Concern” and on March 11, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread
of the coronavirus include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of
public places and businesses. The coronavirus and actions taken to mitigate the spread of it have had and are expected to continue
to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the
Company operates. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted to amongst
other provisions, provide emergency assistance for individuals, families and businesses affected by the coronavirus pandemic.
It is unknown how long the adverse conditions associated with the coronavirus will last and what the complete financial effect
will be to the company. To date, the Company is experiencing challenges in multiple areas of the organization and the full economic
impact is yet to be established.
During
the year ended March 31, 2020 we made significant strides and wide sweeping changes. While we believe they will be beneficial
to our bottom line, there is no assurance of this. Some of the concerns we face going forward will continue, including but not
limited to:
|
●
|
Supply
chain issues for Apex Tek, LLC and the sourcing of miners due to the worldwide COVID pandemic and manufacturing slow downs
|
|
|
|
|
●
|
SAFETek,
LLC operations not scaling according to projections with decreased output due to mining difficulty and operational cost
|
|
|
|
|
●
|
Regulatory
reform that could adversely impact the use and demand of digital currencies
|
|
|
|
|
●
|
The
recent Bitcoin (BTC) halving event that further reduced mining output in addition to the supply chain issues
|
INVESTVIEW,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF SEPTEMBER 30, 2020
(Unaudited)
Apex
Tek, LLC and SAFETek, LLC carry additional risk and generated recent losses, however, they also provide Investview a stake in
4IR, HPC, app development, fintech, blockchain and personal money management sectors. Each of these are areas that are targeted
for significant growth spurred by innovations through technology which solidify our position in the fintech space.
While
our liabilities are larger than our assets it is important to note that we seek to further reduce our operating expense. The assets
we have acquired and will continue to seek out are those of technology, mobile apps, and human resources. These assets are not
easily defined on our balance sheet but represent our ability to carry out our objectives which we believe will ultimately lead
to positive cash flow, reduced debt and then profitability.
Accordingly,
the accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United
States of America, which contemplate our continuation as a going concern and the realization of assets and satisfaction of liabilities
in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not
necessarily purport to represent realizable or settlement values. The financial statements do not include any adjustment that
might result from the outcome of this uncertainty.
NOTE
5 – RELATED-PARTY TRANSACTIONS
Our
related-party payables consisted of the following:
|
|
September 30,
2020
|
|
|
March 31,
2020
|
|
Short-term advances [1]
|
|
$
|
489,850
|
|
|
$
|
876,427
|
|
Promissory note entered into on 1/30/20 [2]
|
|
|
1,133,333
|
|
|
|
1,033,333
|
|
Convertible Promissory Note entered into on 4/27/20 [3]
|
|
|
77,198
|
|
|
|
-
|
|
Convertible Promissory Note entered into on 5/27/20 [4]
|
|
|
36,019
|
|
|
|
-
|
|
Accounts payable – related party [5]
|
|
|
30,000
|
|
|
|
55,000
|
|
|
|
$
|
1,766,400
|
|
|
$
|
1,964,760
|
|
[1]
|
We
periodically receive advances for operating funds from our current majority shareholders and other related parties, including
entities that are owned, controlled, or influenced by our owners or management. These advances are due on demand and are unsecured.
During the six months ended September 30, 2020, we received $2,338,137 in cash proceeds from advances, incurred $50,000 in
interest expense on the advances, and repaid related parties $2,816,713. Also during the six months ended September
30, 2020 there was a change in senior management therefore $26,001 due to a former member of the senior management team was
reclassified from a related party payable to debt on our balance sheet (see NOTE 6).
|
|
|
[2]
|
We
entered into a $1,000,000 promissory note with Joeseph Cammarata, our Chief Executive Officer, on January 30, 2020. The term
of the note is one year, at which time the principal and interest of 20%, or $200,000 will be due. During the six months ended
September 30, 2020 we recognized $100,000 of interest expense on the note.
|
|
|
[3]
|
On
April 27, 2020 we received proceeds of $1,300,000 from DBR Capital, LLC, an entity controlled by members of our Board of Directors.
The note bears interest at 20% per annum, payable monthly, and the principal is due and payable on April 27, 2030. The note
is convertible into common stock at a conversion price of $0.01257 per share therefore during the six months ended September
30, 2020 we recorded a beneficial conversion feature and debt discount of $1,300,000 (see NOTE 8). During the six months ended
September 30, 2020 we recognized $55,531 of the debt discount into interest expense as well as expensed an additional $111,223
of interest expense on the note, of which $89,556 was repaid during the period.
|
|
|
[4]
|
On
May 27, 2020 we received proceeds of $700,000 from DBR Capital, LLC, an entity controlled by members of our Board of Directors.
The note bears interest at 20% per annum, payable monthly, and the principal is due and payable on April 27, 2030. The note
is convertible into common stock at a conversion price of $0.01257 per share therefore during the six months ended September
30, 2020 we recorded a beneficial conversion feature and debt discount of $700,000 (see NOTE 8). During the six months ended
September 30, 2020 we recognized $24,352 of the debt discount into interest expense as well as expensed an additional $48,614
of interest expense on the note, of which $36,947 was repaid during the period.
|
|
|
[5]
|
During
the six months ended September 30, 2020 we paid $25,000 to an accounting firm owned by our Chief Financial Officer to reduce
amounts previously owed. We also incurred $68,000 to reimburse DBR Capital, LLC, for amounts paid on our behalf. The entire
amount was repaid during the six months ended September 30, 2020.
|
INVESTVIEW,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF SEPTEMBER 30, 2020
(Unaudited)
NOTE
6 – DEBT
Our
debt consisted of the following:
|
|
September 30,
2020
|
|
|
March 31,
2020
|
|
Short-term advance received on 8/31/18 [1]
|
|
$
|
35,000
|
|
|
$
|
65,000
|
|
Secured merchant agreement for future receivables entered into on 8/16/19 and refinanced on 12/10/19 [2]
|
|
|
-
|
|
|
|
1,223,615
|
|
Secured merchant agreement for future receivables entered into on 8/16/19 [3]
|
|
|
-
|
|
|
|
260,090
|
|
Convertible promissory note entered into on 3/5/20 [4]
|
|
|
-
|
|
|
|
13,072
|
|
Convertible promissory note entered into on 3/11/20 [5]
|
|
|
-
|
|
|
|
7,549
|
|
Short-term advance received on 3/25/20 [6]
|
|
|
95,000
|
|
|
|
150,000
|
|
Promissory note entered into on 4/10/20 [7]
|
|
|
400,000
|
|
|
|
-
|
|
Note issued under the Paycheck Protection Program on 4/17/20 [8]
|
|
|
507,598
|
|
|
|
-
|
|
Loan with the U.S. Small Business Administration dated 4/19/20 [9]
|
|
|
508,322
|
|
|
|
-
|
|
Short-term advance received from a former member of senior management [10]
|
|
|
26,001
|
|
|
|
-
|
|
|
|
$
|
1,571,921
|
|
|
$
|
1,719,326
|
|
[1]
|
In
August 2018, we received a $75,000 short-term advance. The advance is due on demand, has no interest rate, and is unsecured.
During the six months ended September 30, 2020 we made repayments of $30,000 on the debt.
|
|
|
[2]
|
During
August 2019, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access
to working capital. On August 15, 2019, we received proceeds from this arrangement of $339,270 after paying off $316,093 and
$297,033 from two separate February 2018 agreements. In accordance with the terms of the new agreement, we were required to
repay $1,399,000 by making daily ACH payments of $6,823. Accordingly, we recorded $446,604 as a debt discount at the inception
of the agreement, which was the difference between the funds received plus the earlier debt paid off, and the amount that
was to be repaid.
|
|
|
|
Effective
December 10, 2019 this debt was refinanced and the outstanding balance of $839,514 was rolled into a new Secured Merchant
Agreement for future receivables. Prior to the refinance, we repaid $559,486 and amortized $446,605 into interest expense
related to the August 2019 arrangement. As a result of the refinancing arrangement we received proceeds of $854,801. In accordance
with the terms of the agreement, we were required to repay $2,448,250 by making daily ACH payments of $10,999. Accordingly,
we recorded $753,935 as a debt discount at the inception of the agreement, which was the difference between the funds received
plus the earlier debt paid off, and the amount that was to be repaid. During the year ended March 31, 2020, after the refinance,
we repaid $747,932 and amortized $277,232 into interest expense related to the new December 2019 agreement. During the six
months ended September 30, 2020 we amortized $442,894 into interest expense and repaid $1,071,996 to pay the debt off in full,
which resulted in a gain on settlement of debt being recorded for $594,513.
|
|
|
[3]
|
During
August 2019, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access
to working capital. In August 2019, we received proceeds from this arrangement of $418,381 after paying off $382,000 from
an October 2018 agreement. In accordance with the terms of the agreement, we were required to repay $1,189,150 by making daily
ACH payments of $5,801. Accordingly, we recorded $388,769 as a debt discount at the inception of the agreement, which was
the difference between the funds received plus the earlier debt paid off, and the amount that was to be repaid. During the
year ended March 31, 2020, we repaid $853,203 and amortized $312,912 into interest expense. During the six months ended September
30, 2020 we repaid $330,013, recorded a $5,934 gain on settlement of debt, and amortized $75,857 into interest expense
|
|
|
[4]
|
In
March 2020, we entered into a Convertible Promissory Note and received proceeds of $200,000 after incurring loan fees of $3,000.
The note incurred interest at 10% per annum and had a maturity date of June 2, 2021. The Convertible Promissory Note had a
variable conversion rate that was 65% of the average of the two lowest trading prices during the previous 15-trading-day period,
subject to adjustment. Therefore, the conversion feature was accounted for as a derivative instrument (see NOTE 7). At inception,
we recorded a debt discount of $203,000 and captured loan fees, recorded as interest expense, of $116,077. During the year
ended March 31, 2020, we amortized $11,626 into interest expense, and recorded additional interest expense on the note of
$1,446. During the six months ended September 30, 2020, we amortized $59,916 into interest expense, and recorded additional
interest expense on the note of $7,453 before we repaid the note in full for $262,649 and wrote off the derivative liability
associated with the debt of $265,584 (see NOTE 7), resulting in a net gain on settlement of debt being recorded for $83,376.
|
|
|
[5]
|
In
March 2020, we entered into a Convertible Promissory Note and received proceeds of $150,000 after incurring loan fees of $3,000.
The note incurred interest at 10% per annum and had a maturity date of June 10, 2021. The Convertible Promissory Note had
a variable conversion rate that was 65% of the average of the two lowest trading prices during the previous 15-trading-day
period, subject to adjustment. Therefore, the conversion feature was accounted for as a derivative instrument (see NOTE 7).
At inception, we recorded a debt discount of $153,000 and captured loan fees, recorded as interest expense, of $148,432. During
the year ended March 31, 2020, we amortized $6,711 into interest expense, and recorded additional interest expense on the
note of $838. During the six months ended September 30, 2020, we amortized $44,960 into interest expense and recorded additional
interest expense on the note of $5,617 before we repaid the note in full for $197,351 and wrote off the derivative liability
associated with the debt of $203,357 (see NOTE 7), resulting in a net gain on settlement of debt being recorded for $64,132.
|
INVESTVIEW,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF SEPTEMBER 30, 2020
(Unaudited)
[6]
|
In
March 2020, we received a $150,000 short-term advance. The advance is due on demand, has no interest rate, and is unsecured.
During the six months ended September 30, 2020 we made repayments of $55,000 on the debt.
|
|
|
[7]
|
In
April 2020, we received proceeds of $400,000 after entering into a promissory note that is due six months from the funding
date. Under the note six interest only payments of $16,667 are to be made on the 20th of each month beginning in
May 2020. Collateral for the note is, in priority order, is: the reserve and current balance in one of our merchant accounts,
the reserve account in a second separate merchant accounts, shares of our common stock, and high-speed computer processing
equipment. During the six months ended September 30, 2020 we recorded and paid $83,335 worth of interest expense.
|
|
|
[8]
|
In
April 2020 we received $505,300 in proceeds from the Paycheck Protection Program as established by the CARES Act as a result
of a Note entered into with the U.S. Small Business Administration. The note has an interest rate of 1% and matures on April
1, 2022. Under the Note we are required to make monthly payments beginning November 1, 2020, however, under the terms of the
CARES Act the loan may be forgiven if funds are used for qualifying expenses. During the six months ended September 30, 2020
we recorded $2,298 worth of interest expense on the Note.
|
|
|
[9]
|
In
April 2020 we received proceeds of $500,000 from a loan entered into with the U.S. Small Business Administration. Under the
terms of the loan interest is to accrue at a rate of 3.75% per annum and installment payments of $2,437 monthly will begin
twelve months from the date of the loan, with all interest and principal due and payable thirty years from the date of the
loan. During the six months ended September 30, 2020 we recorded $8,322 worth of interest on the loan.
|
|
|
[10]
|
During
the six months ended September 30, 2020 there was a change in senior management therefore $26,001 due to a former member of
the senior management team was reclassified on our balance sheet from a related party payable to debt (see NOTE 5).
|
NOTE
7 – DERIVATIVE LIABILITY
During
the six months ended September 30, 2020, we had the following activity in our derivative liability account:
|
|
Debt
|
|
|
Warrants
|
|
|
Total
|
|
Derivative liability at March 31, 2020
|
|
$
|
793,495
|
|
|
$
|
-
|
|
|
$
|
793,495
|
|
Derivative liability recorded on new instruments
|
|
|
-
|
|
|
|
6,499
|
|
|
|
6,499
|
|
Derivative liability reduced by debt settlement (see NOTE 6)
|
|
|
(468,941
|
)
|
|
|
-
|
|
|
|
(468,941
|
)
|
Change in fair value
|
|
|
(324,554
|
)
|
|
|
(2,234
|
)
|
|
|
(326,788
|
)
|
Derivative liability at September 30, 2020
|
|
$
|
-
|
|
|
$
|
4,265
|
|
|
$
|
4,265
|
|
We
use the binomial option pricing model to estimate fair value for those instruments convertible into common stock, at inception,
at conversion or settlement date, and at each reporting date. During the six months ended September 30, 2020, the assumptions
used in our binomial option pricing model were in the following range:
|
|
Debt
|
|
Warrants
|
|
Risk free interest rate
|
|
0.11 - 0.17%
|
|
0.21 - 0.28%
|
|
Expected life in years
|
|
0.80 - 1.11
|
|
4.84 - 5.00
|
|
Expected volatility
|
|
128% - 239%
|
|
265% - 306%
|
|
NOTE
8 – STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred
Stock
We
are authorized to issue up to 50,000,000 shares of preferred stock with a par value of $0.001 and our board of directors has the
authority to issue one or more classes of preferred stock with rights senior to those of common stock and to determine the rights,
privileges, and preferences of that preferred stock.
As
of March 31, 2020, we had no preferred stock issued or outstanding.
INVESTVIEW,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF SEPTEMBER 30, 2020
(Unaudited)
During
the year ended March 31, 2020 our Board of Directors approved the designation of 2,000,000 of the Company’s shares of preferred
stock as Series B Cumulative Redeemable Perpetual Preferred Stock (“Series B Preferred Stock”), each with a stated
value of $25 per share. Our Series B Preferred Stock holders are entitled to 500 votes per share, are entitled to receive cumulative
dividends at the annual rate of 13% per annum of the stated value, equal to $3.25 per annum per share.
During
the six months ended September 30, 2020 we commenced a security offering to sell a total of 2,000,000 units at $25 per unit (“Unit
Offering”), such that each unit consisted of: (i) one share of our newly authorized Series B Preferred Stock and (ii) five
warrants each exercisable to purchase one share of common stock at an exercise price of $0.10 per warrant share. Each Warrant
offered is immediately exercisable on the date of issuance, will expire 5 years from the date of issuance, and its value has been
classified as a fair value liability due to the terms of the instrument (see NOTE 7). During the six months ended September 30,
2020 we sold 46,612 units for gross proceeds of $1,165,300, therefore recorded the issuance of 46,612 shares of Series B Preferred
Stock and the grant of 233,060 warrants during the period. Of the gross proceeds, $6,499 was allocated to the warrants and recorded
as a derivative liability and $1,158,801 was allocated to the preferred stock ($47 recorded as the par value and $1,158,754 allocated
to additional paid in capital). Also in conjunction with the Unit Offering we paid $21,000 of offering costs which was allocated
between the preferred stock and warrants. The $20,994 allocated to the preferred stock decreased additional paid in capital due
to the underlying instrument being classified as equity and the $6 allocated to the warrants was immediately expensed as offering
costs due to the underlying instrument being classified as a fair value liability.
Preferred
Stock Dividends
During
the six months ended September 30, 2020 we recorded $52,342 for the cumulative cash dividends due to the shareholders of our Series
B Preferred Stock and paid $14,567 of these amounts owing. As a result we recorded $37,775 as a dividend liability on our balance
sheet as of September 30, 2020.
Common
Stock
During
the six months ended September 30, 2020, we issued 21,000,000 shares of common stock, valued at $399,000 based on the market value
on the day of issuance, for services and compensation, which is subject to forfeiture if the employee or contractor is not in
good standing at the time the shares are fully vested. Of the $399,000 value we recognized $128,497 as an expense during the six
months ending September 30, 2020 and the remaining $270,503 will be recognized ratably over the vesting term. In addition, during
the six months ended September 30, 2020, we recognized $666,738 as expense due to the vesting of shares of common stock previously
issued.
During
the six months ended September 30, 2020, we repurchased 9,079 shares of our common stock from a third party for $272 and repurchased
106,000,000 shares of our common stock from former members of our senior management team and founders for $120,000, all of which
was recorded in Accounts Payable on our balance sheet at September 30, 2020. These shares repurchased were immediately canceled.
Also, during the six months ended September 30, 2020 we recorded an increase in Additional Paid in Capital of $2,000,000 related
to beneficial conversion features on our related party debt (see NOTE 5) and recorded an increase in Additional Paid in Capital
of $373,832 for accrued payroll forgiven by a member of our senior management team at the time his employment with the Company
ended.
During
the six months ended September 30, 2020 we cancelled 200,000,000 shares returned in conjunction with the termination of a Joint
Venture Agreement entered into in March of 2019, reducing common stock by $200,000, reducing additional paid in capital by $3,180,000,
offset with a reduction in our prepaid asset of $2,428,044 and a reversal of previously recorded expense of $951,956.
As
of September 30, 2020 and March 31, 2020, we had 2,929,481,329 and 3,214,490,408 shares of common stock issued and outstanding,
respectively.
Warrants
During
the six months ended September 30, 2020 we granted 233,060 warrants in conjunction with our Unit Offering. The warrants are classified
as a derivative liability on our balance sheet in accordance with ASC 480, Distinguishing Liabilities from Equity, based on the
warrants terms that indicate a fundamental transaction could give rise to an obligation for us to pay cash to our warrant holders
(see NOTE 7).
INVESTVIEW,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF SEPTEMBER 30, 2020
(Unaudited)
Details
of our warrants outstanding as of September 30, 2020 is as follows:
Exercise Price
|
|
Warrants Outstanding
|
|
Warrants Exercisable
|
|
Weighted Average Contractual Life (Years)
|
|
$
|
0.10
|
|
233,060
|
|
233,060
|
|
4.79
|
|
NOTE
9 – COMMITMENTS AND CONTINGENCIES
Litigation
In
the ordinary course of business, we may be, or have been, involved in legal proceedings from time to time. During the six months
ended September 30, 2020 we were not involved in any material legal proceedings.
NOTE
10 – OPERATING LEASE
In
February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard establishes a right-of-use (“ROU”)
model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases. Leases are classified
as either finance or operating with classification affecting the pattern of expense recognition in the statement of operations.
We adopted ASU No. 2016-02 on April 1, 2019. We did not record a lease asset and lease liability as of the adoption date as we
had no lease arrangements or lease obligation at that time.
In
August 2019 we entered an operating lease for office space in Eatontown, New Jersey (the “Eatontown Lease”) and in
September 2019 we entered an operating lease for office space in Kaysville, Utah (the “Kaysville Lease”). We have
the option to extend the three year lease term of the Eatontown Lease for a period of one year. In addition, we are obligated
to pay twelve monthly installments to cover an annual utility charge of $1.75 per rentable square foot for electric usage within
the demised premises. As the lessor has the right to digitally meter and charge us accordingly, these payments were deemed variable
and will be expensed as incurred. During the three and six months ended September 30, 2020 the variable lease costs amounted to
$831 and $1,662, respectively. At commencement of the Eatontown Lease, right-of-use assets obtained in exchange for new operating
lease liabilities amounted to $110,097. At commencement of the Kaysville Lease, right-of-use assets obtained in exchange for new
operating lease liabilities amounted to $21,147. As of October 1, 2020, the Company began leasing the property located in Kaysville
on a month to month basis.
Operating
lease expense was $16,397 and $32,794 for the three and six months ended September 30, 2020. Operating cash flows used for the
operating leases during the three and six months ended September 30, 2020 were $16,897 and $32,794. As of September 30, 2020,
the weighted average remaining lease term was 1.83 years and the weighted average discount rate was 12%.
Future
minimum lease payments under non-cancellable leases as of September 30, 2019 were as follows:
Remainder of 2021
|
|
$
|
24,000
|
|
2022
|
|
|
48,000
|
|
2023
|
|
|
16,000
|
|
Total
|
|
|
88,000
|
|
Less: Interest
|
|
|
(8,572
|
)
|
Present value of lease liability
|
|
|
79,428
|
|
Operating lease liability, current [1]
|
|
|
(48,000
|
)
|
Operating lease liability, long term
|
|
$
|
31,428
|
|
[1]
Represents lease payments to be made in the next 12 months
NOTE
11 – SUBSEQUENT EVENTS
Subsequent
to September 30, 2020, we paid $7,601 of dividends that were accrued as of September 30, 2020. Also, subsequent to September 30,
2020, we received gross proceeds of $93,300 in connection with our Unit Offering.
In
accordance with ASC Topic 855, Subsequent Events, we have evaluated subsequent events through the date of this filing and have
determined that there are no additional subsequent events that require disclosure.